Sectoral Investment and Trade in Pakistan: An Empirical Analysis

Abstract

Purpose: This study is conducted to examine the effectiveness of Investment in various sectors of the economy on exports of Pakistan over the period from 1972 to 2018. Methodology: For this purpose, World Development Indicators and Handbook of Statistics on Pakistan Economy have been utilized to collect time-series data on the related variables. Moreover, the econometric results have been calculated using the ARDL approach and diagnostics statistics are based on Normality Test, Ramsey RESET test and stability tests. Findings: The long-run results explore that Investments in the Agriculture & Manufacturing sectors, Terms of Trade and Human Capital are increasing exports of Pakistan while investments in Services & Transportation sectors are reducing exports of Pakistan. Implications: Based on econometric results, it is suggested that investments in manufacturing and agriculture sectors should be enhanced through low interest rates or by providing opportunities to the private sector so that it may lead to higher growth and exports.

Keywords

• Sectoral Investment
• Agriculture
• ARDL
• Pakistan